Bill L.'s InstablogMethodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market indexes, to a much lesser extent commodities, currencies, very rarely individual stocks, and always with defined risk.
MBA with a concentration in finance, The State University of New York. BS in management, concentrations in accounting, and finance. Chartered Market Technician candidate (all exams passed). +6 years professional trading experience.
Publishing Schedule for 2013: A long term update will be put out on the first of the month discussing the long term trend and long term indicators. Short term updates will be published on Mondays and Wednesday discussing the short term indicators and price action. A short comment will be published on Tuesdays and Thursdays. Friday's will have a short market update, as well as a full sentiment update and review for the week.Bill L.http://seekingalpha.com/author/bill-l/instablog
Where Can I Find Sentiment Data?http://seekingalpha.com/instablog/409567-bill-l/1853981-where-can-i-find-sentiment-data?source=feed
1853981
I've gotten some requests for data sources, and since I'm not writing regularly anymore I figured I would just share of the best free sources of sentiment data that I know of and which I used for my sentiment updates.

1) Put/Call Ratio: For this I use stockcharts.com (here's the link: stockcharts.com/h-sc/ui) and I enter in the ticker symbol $CPC. This can also be broken up into two parts, equity only and index only, ticker symbols $CPCE and $CPCI. I typically add a 5 and 10 day moving average to smooth out the fluctuations.

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Mon, 13 May 2013 16:40:40 -0400
I've gotten some requests for data sources, and since I'm not writing regularly anymore I figured I would just share of the best free sources of sentiment data that I know of and which I used for my sentiment updates.

1) Put/Call Ratio: For this I use stockcharts.com (here's the link: stockcharts.com/h-sc/ui) and I enter in the ticker symbol $CPC. This can also be broken up into two parts, equity only and index only, ticker symbols $CPCE and $CPCI. I typically add a 5 and 10 day moving average to smooth out the fluctuations.

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spyqqqdia�������Monday, March 25, 2013 - Long Some Goldhttp://seekingalpha.com/instablog/409567-bill-l/1688491-x01-x01-x01-x01-x01-x01-x01monday-march-25-2013-long-some-gold?source=feed
1688491Summary:

While the stock market is off in la-la land, I've been looking for more reasonable risk reward setups, more specifically right now I'm long some GLD.

Originally this idea was flagged to me by Sundate36 in the comments section, here is the original article is recommended reading.

Commitment of Traders:

Looking at the most recent commitment of traders report, commercials have been going long gold for several weeks now as the GLD approached some decent looking horizontal support.

So clearly while the public has been losing faith, the bookies of the futures world had some faith in gold finding some sort of a foothold.

(click to enlarge)

(click to enlarge)

(click to enlarge)

Notes: The basic oscillators hit oversold while price entered an area of horizontal support. Furthermore the Gold COT revealed that commercial hedgers had been increasing their net position, while small speculators have been giving up on gold.

Seasonality:

Furthermore, in terms of seasonality February tends to be very negative for Gold, with performance improving in March, and going positive into April. If we get another soft patch in the summer, that could present another good buying opportunity into the fall months.

(click to enlarge)

Other Notable Notables:

According to Sentimentraders public opinion indicator, public opinion recently dropped to the lowest level visible on the chart (going back to 2007). It has since improved a tad, but remains at very low overall levels.

According to Hulbert Financial Digest, news letter writers have also turned negative on gold, and are now recommending a net short position in gold. This however tends to work better as a contrarian indicator, and these low levels have historically been a bullish sign.

According to Rydex, the assets in precious metal funds has fallen to historically low levels.

Summary:

The risk reward in gold is skewed enough for me to try a long position in GLD, I'm long until we start to see some of these indicators reverse, and I'm out if we break below the green area of support in the first chart (around 147 in the GLD).

-Bill L.

]]>
Mon, 25 Mar 2013 18:35:33 -0400Summary:

While the stock market is off in la-la land, I've been looking for more reasonable risk reward setups, more specifically right now I'm long some GLD.

Originally this idea was flagged to me by Sundate36 in the comments section, here is the original article is recommended reading.

Commitment of Traders:

Looking at the most recent commitment of traders report, commercials have been going long gold for several weeks now as the GLD approached some decent looking horizontal support.

So clearly while the public has been losing faith, the bookies of the futures world had some faith in gold finding some sort of a foothold.

(click to enlarge)

(click to enlarge)

(click to enlarge)

Notes: The basic oscillators hit oversold while price entered an area of horizontal support. Furthermore the Gold COT revealed that commercial hedgers had been increasing their net position, while small speculators have been giving up on gold.

Seasonality:

Furthermore, in terms of seasonality February tends to be very negative for Gold, with performance improving in March, and going positive into April. If we get another soft patch in the summer, that could present another good buying opportunity into the fall months.

(click to enlarge)

Other Notable Notables:

According to Sentimentraders public opinion indicator, public opinion recently dropped to the lowest level visible on the chart (going back to 2007). It has since improved a tad, but remains at very low overall levels.

According to Hulbert Financial Digest, news letter writers have also turned negative on gold, and are now recommending a net short position in gold. This however tends to work better as a contrarian indicator, and these low levels have historically been a bullish sign.

According to Rydex, the assets in precious metal funds has fallen to historically low levels.

Summary:

The risk reward in gold is skewed enough for me to try a long position in GLD, I'm long until we start to see some of these indicators reverse, and I'm out if we break below the green area of support in the first chart (around 147 in the GLD).

-Bill L.

]]>
gldslvuup������NYSE Margin Near All Time Highshttp://seekingalpha.com/instablog/409567-bill-l/1571901-x01-x01-x01-x01-x01-x01nyse-margin-near-all-time-highs?source=feed
1571901
So I've taken a little hiatus from the daily update because I wanted to point out some of the longer term indicators I watch but don't speak about too often. Which brings me to margin debt. I always seem to get the most pointed and emotional criticisms at major inflection points. Probably because I'm a contrarian at these points, and those who don't agree have a lot on the line. How much? Well, just about the most ever according to data from the NYSE.

I keep a spread sheet of NYSE margin debt, you know, for fun. It's a very long term indicator, and not very "trade-able". But as a long term windsock of sorts, it can clue you in to when the term trend is getting long in the tooth.

Chart 1: NYSE Margin Debt (MM)

(click to enlarge)Notes: We can see from the chart above that the amount of margin debt in nominal terms has already exceeded the level that corresponded to the 2000 dot.com bubble, and is quickly approaching the 2007 highs.

Chart 2: NYSE Margin Debt, Inflation Adjusted

That said, $325 billion ain't what it used to be. We've endured quite a bit of inflation, thank you Fed, so I decided to adjust for inflation using the CPI and 1995 of my base year.

(click to enlarge)Notes: So here we can see that margin debt in terms of 1995 constant dollars hasn't risen as high as either bubble peaks. The market seems to peak when we get to that $250 billion range and we're not quite there yet. That said, the economy was a lot stronger in 2007, and stronger still in 2000. Like I said, this data isn't very trade-able, meaning it gets to X and you automatically do Y. Still, whether you're looking at the nominal or real amount of margin debt, things are getting interesting...

-Bill L.

Disclosure: I am short [[SPY]].

]]>
Wed, 20 Feb 2013 18:51:56 -0500
So I've taken a little hiatus from the daily update because I wanted to point out some of the longer term indicators I watch but don't speak about too often. Which brings me to margin debt. I always seem to get the most pointed and emotional criticisms at major inflection points. Probably because I'm a contrarian at these points, and those who don't agree have a lot on the line. How much? Well, just about the most ever according to data from the NYSE.

I keep a spread sheet of NYSE margin debt, you know, for fun. It's a very long term indicator, and not very "trade-able". But as a long term windsock of sorts, it can clue you in to when the term trend is getting long in the tooth.

Chart 1: NYSE Margin Debt (MM)

(click to enlarge)Notes: We can see from the chart above that the amount of margin debt in nominal terms has already exceeded the level that corresponded to the 2000 dot.com bubble, and is quickly approaching the 2007 highs.

Chart 2: NYSE Margin Debt, Inflation Adjusted

That said, $325 billion ain't what it used to be. We've endured quite a bit of inflation, thank you Fed, so I decided to adjust for inflation using the CPI and 1995 of my base year.

(click to enlarge)Notes: So here we can see that margin debt in terms of 1995 constant dollars hasn't risen as high as either bubble peaks. The market seems to peak when we get to that $250 billion range and we're not quite there yet. That said, the economy was a lot stronger in 2007, and stronger still in 2000. Like I said, this data isn't very trade-able, meaning it gets to X and you automatically do Y. Still, whether you're looking at the nominal or real amount of margin debt, things are getting interesting...

Last week I noted how despite the apparent strength in the equity markets, insiders had been using the noise from the "Dow 14,000" party to quietly sell their shares. This week that selling has continued except for a few very large buys in EMC/VMW. Without these large buys, the sell bias would be even more skewed.

In the table below I've been summing the largest purchases and sales each day in February in both dollar terms and share volume.

Chart 1: February Insider Activity

In terms of dollar amount, insiders have been selling almost $10 dollars worth of stock for every $1 dollar in purchases. In terms of share volume, over 7 shares of stock have been sold for every 1 share in purchases.

If we simply plotted every dollar sold vs dollar bought in a cumulative plot, we can see how the selling is outpacing the buying.

Chart 2: Cumulative Sales vs Purchases by Insiders

(click to enlarge)

We'll see what happens the rest of the month, but when insiders flee their own company's stock in droves, that generally not a good sign.

On another note, seeing as how insiders at EMC and VM have been making large purchases ($50 million dollar worth give or take), I'll take a look there for anything interesting...

-Bill L.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[SPY]] over the next 72 hours.

Last week I noted how despite the apparent strength in the equity markets, insiders had been using the noise from the "Dow 14,000" party to quietly sell their shares. This week that selling has continued except for a few very large buys in EMC/VMW. Without these large buys, the sell bias would be even more skewed.

In the table below I've been summing the largest purchases and sales each day in February in both dollar terms and share volume.

Chart 1: February Insider Activity

In terms of dollar amount, insiders have been selling almost $10 dollars worth of stock for every $1 dollar in purchases. In terms of share volume, over 7 shares of stock have been sold for every 1 share in purchases.

If we simply plotted every dollar sold vs dollar bought in a cumulative plot, we can see how the selling is outpacing the buying.

Chart 2: Cumulative Sales vs Purchases by Insiders

(click to enlarge)

We'll see what happens the rest of the month, but when insiders flee their own company's stock in droves, that generally not a good sign.

On another note, seeing as how insiders at EMC and VM have been making large purchases ($50 million dollar worth give or take), I'll take a look there for anything interesting...

-Bill L.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[SPY]] over the next 72 hours.

]]>
emcvmwspydiaqqqiwmxlftltiefvxx����Tuesday, February 12, 2013 - Block Trade Updatehttp://seekingalpha.com/instablog/409567-bill-l/1542011-x01-x01-x01-x01tuesday-february-12-2013-block-trade-update?source=feed
1542011
A while back I wrote I had become interested in block trading data after reading an interview with Phil Roth. I started collecting block trading records in hopes of turning it into some sort of an indicator once I had enough historical data. I've received some requests for updates on the block trading indicator. I'm happy to oblige, however there is one unfortunate caveat. I had collected this data for over a year and was planning on testing it for possible signals. Unfortunately, my previous work computer had a hard drive failure, and this particular file was not set to automatically save on my back up drive. Anyway, I've started collecting it again and I'll posting it as it becomes available (it is updated once a week).

I believe Phil Roth keeps several MA crossovers so that's what I've decided to do here (as well as a cumulative chart).

Raw Numbers as Reported by Barons:

(click to enlarge)

For the moving average charts, I'm taken block trades on up ticks, and subtracted block trades on down ticks, then created a 5 and 10 day moving average. The presumption here is that by studying these figures we will get a sense of the direction of institutional money flow. This in turn could be used as confirmation of the trend or possibly as a short/medium term trade signal by riding their coattails (when we see a crossover perhaps?).

NYSE Block Trade 5,10 MA

(click to enlarge)

Notes: What's interesting to me here is that we've had a negative crossover and that the 10 DMA is pointing down. The 5 DMA appears that it might be turning back up, but the overall message here is that institutional flow isn't particularly strong here despite the multi-year highs and the 14k celebrations.

NASDAQ Block Trade 5,10 MA

(click to enlarge)

Notes: The NASDAQ hasn't been as strong as the other indexes, and block trading in the NASDAQ exchanges looks even weaker than the NYSE's. Here there is a negative crossover as well, but with both MAs pointing down.

NYSE Cumulative Block Trades

(click to enlarge)

Notes: Here I'm simply calculated a running total of every day's result. I'm not sure what to do with this at the moment. It may become an oscilator, or it may become a trend confirmation indicator. We'll see, but I thought I would include it since it was so easy to calculate. At the moment it's pointing down and it is below the zero line (with so limited history it's hard to say that either is important), which is interesting considering the strength of the market the last several weeks when this data was collected.

NASDAQ Cumulative Block Trades

(click to enlarge)

Notes: The NASDAQ cumulative chart looks choopy and sideways, but is also currently below zero and pointing lower. Hopefully after a few more ups and downs, we'll start to see reoccuring behaviours in these series that will allow us to better predict the market over the medium term.

-Bill L.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[SPY]] over the next 72 hours.

]]>
Tue, 12 Feb 2013 16:15:34 -0500
A while back I wrote I had become interested in block trading data after reading an interview with Phil Roth. I started collecting block trading records in hopes of turning it into some sort of an indicator once I had enough historical data. I've received some requests for updates on the block trading indicator. I'm happy to oblige, however there is one unfortunate caveat. I had collected this data for over a year and was planning on testing it for possible signals. Unfortunately, my previous work computer had a hard drive failure, and this particular file was not set to automatically save on my back up drive. Anyway, I've started collecting it again and I'll posting it as it becomes available (it is updated once a week).

I believe Phil Roth keeps several MA crossovers so that's what I've decided to do here (as well as a cumulative chart).

Raw Numbers as Reported by Barons:

(click to enlarge)

For the moving average charts, I'm taken block trades on up ticks, and subtracted block trades on down ticks, then created a 5 and 10 day moving average. The presumption here is that by studying these figures we will get a sense of the direction of institutional money flow. This in turn could be used as confirmation of the trend or possibly as a short/medium term trade signal by riding their coattails (when we see a crossover perhaps?).

NYSE Block Trade 5,10 MA

(click to enlarge)

Notes: What's interesting to me here is that we've had a negative crossover and that the 10 DMA is pointing down. The 5 DMA appears that it might be turning back up, but the overall message here is that institutional flow isn't particularly strong here despite the multi-year highs and the 14k celebrations.

NASDAQ Block Trade 5,10 MA

(click to enlarge)

Notes: The NASDAQ hasn't been as strong as the other indexes, and block trading in the NASDAQ exchanges looks even weaker than the NYSE's. Here there is a negative crossover as well, but with both MAs pointing down.

NYSE Cumulative Block Trades

(click to enlarge)

Notes: Here I'm simply calculated a running total of every day's result. I'm not sure what to do with this at the moment. It may become an oscilator, or it may become a trend confirmation indicator. We'll see, but I thought I would include it since it was so easy to calculate. At the moment it's pointing down and it is below the zero line (with so limited history it's hard to say that either is important), which is interesting considering the strength of the market the last several weeks when this data was collected.

NASDAQ Cumulative Block Trades

(click to enlarge)

Notes: The NASDAQ cumulative chart looks choopy and sideways, but is also currently below zero and pointing lower. Hopefully after a few more ups and downs, we'll start to see reoccuring behaviours in these series that will allow us to better predict the market over the medium term.

-Bill L.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[SPY]] over the next 72 hours.

Sentiment has come in a bit more this week, though overall still remains very elevated, and even extreme according to some measures.

The Put/Call Ratio ($CPC):

(click to enlarge)

Analysis: The put call ratio reached an extreme as did the VIX last week, however since then it has slowly mean reverted as the market has been stalling. Now it is leaning towards the neutral/put side.

Grade: The put call ratio is showing a slight put bias, however the related VIX is still at very, very low levels. Taken together I think the best way to interpret sentiment through the lens of the options market is Neutral.

Analysis: News letter writers on the other hand continue to push the bullish message onto their readers. %Bulls increased slightly while the ranks of the bears continues to diminish, widening the spread to the highest levels since 2011.

Grade: Bearish.

The American Association of Individual Investors (AAII):

The Raw Numbers:

(click to enlarge)

The Bull Bear Spread:

(click to enlarge)

Analysis: Last week the Bull-Bear Spread spiked to a level only seen 5 times in the last 6 years. Since, the numbers have begun to mean revert though they are still elevated.

Grade: Bearish

National Association of Active Investment Managers (NAAIM):

Raw numbers:

(click to enlarge)

Chart:

(click to enlarge)

Analysis: Active managers have pulled back a little bit since last week's record breaking numbers, but are still holding historically extreme long positions.

Grade: Bearish

Short Interest:

Short Interest, [[SPY]]:(click to enlarge)

Short Interest, [[DIA]]:(click to enlarge)

Short Interest, [[QQQ]]:(click to enlarge)

Analysis: Note: Short Interest is only updated twice a month, so these are the same figures as last week's update. That said, the last reported position is at multi-year lows.

Grade: Bearish.

Summary:

So as always we've looked at the options market, bloggers, newsletter writers, individuals, professional money managers, and ETF investors.

Grades:

Bullish:0/6

Neutral: 2/6

Bearish: 4/6

Market sentiment has come in a bit thanks to the put call ratio and individual investors, but overall sentiment still remains very elevated. Even in the market continues higher for a little bit longer, whenever sentiment gets this extreme, those gains are typically completely erased in the following correction. Thus, I'm still advising caution.

-Regards,

Bill L.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[SPY]] over the next 72 hours.

]]>
Fri, 08 Feb 2013 17:54:57 -0500Bottom Line:

Sentiment has come in a bit more this week, though overall still remains very elevated, and even extreme according to some measures.

The Put/Call Ratio ($CPC):

(click to enlarge)

Analysis: The put call ratio reached an extreme as did the VIX last week, however since then it has slowly mean reverted as the market has been stalling. Now it is leaning towards the neutral/put side.

Grade: The put call ratio is showing a slight put bias, however the related VIX is still at very, very low levels. Taken together I think the best way to interpret sentiment through the lens of the options market is Neutral.

Analysis: News letter writers on the other hand continue to push the bullish message onto their readers. %Bulls increased slightly while the ranks of the bears continues to diminish, widening the spread to the highest levels since 2011.

Grade: Bearish.

The American Association of Individual Investors (AAII):

The Raw Numbers:

(click to enlarge)

The Bull Bear Spread:

(click to enlarge)

Analysis: Last week the Bull-Bear Spread spiked to a level only seen 5 times in the last 6 years. Since, the numbers have begun to mean revert though they are still elevated.

Grade: Bearish

National Association of Active Investment Managers (NAAIM):

Raw numbers:

(click to enlarge)

Chart:

(click to enlarge)

Analysis: Active managers have pulled back a little bit since last week's record breaking numbers, but are still holding historically extreme long positions.

Grade: Bearish

Short Interest:

Short Interest, [[SPY]]:(click to enlarge)

Short Interest, [[DIA]]:(click to enlarge)

Short Interest, [[QQQ]]:(click to enlarge)

Analysis: Note: Short Interest is only updated twice a month, so these are the same figures as last week's update. That said, the last reported position is at multi-year lows.

Grade: Bearish.

Summary:

So as always we've looked at the options market, bloggers, newsletter writers, individuals, professional money managers, and ETF investors.

Grades:

Bullish:0/6

Neutral: 2/6

Bearish: 4/6

Market sentiment has come in a bit thanks to the put call ratio and individual investors, but overall sentiment still remains very elevated. Even in the market continues higher for a little bit longer, whenever sentiment gets this extreme, those gains are typically completely erased in the following correction. Thus, I'm still advising caution.

-Regards,

Bill L.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in [[SPY]] over the next 72 hours.